Port Tracker reports strong U.S. import growth, spurred on by tariffs

The byproduct of retail shippers’ “pull forward” efforts to import goods in advance of new tariffs levied on products made in China remained intact based on the new edition of the Port Tracker report, which was released today by the National Retail Federation (NRF) and maritime consultancy Hackett Associates.

The ports surveyed in the report include Los Angeles/Long Beach, Oakland, Tacoma, Seattle, Houston, New York/New Jersey, Hampton Roads, Charleston, and Savannah, Miami, Jacksonville, and Fort Lauderdale, Fla.-based Port Everglades. Authors of the report explained that cargo import numbers do not correlate directly with retail sales or employment because they count only the number of cargo containers brought into the country, not the value of the merchandise inside them, adding that the amount of merchandise imported provides a rough barometer of retailers’ expectations.

“More tariffs could come any day, and retailers have been bringing in record amounts of merchandise ahead of that in order to mitigate the impact on their customers,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Retail sales are growing stronger than expected this year thanks to tax cuts and job creation, but tariffs are the wild card that threaten to throw away a significant portion of those benefits.”

For July, the most recent month for which data is available, Port Tracker reported that U.S.-based retail container ports handled 1.9 million TEU (Twenty-Foot Equivalent Units), which marks a 2.8% increase over June and a 5.6% annual gain. This marks a new monthly record for container import volume, topping the previous high of 1.85 million TEU recorded in June 2018. The previous high before that was August 2017’s 1.83 million TEU.

Port Tracker estimated that August will hit another record at 1.92 million TEU for a 4.8% annual gain, which would represent the third consecutive month to set a new monthly record. September is pegged at 1.83 million TEU for a 2.4% annual gain, and October is forecasted to be up 5% at 1.88 million TEU. November and December are each projected to hit 1.79 million TEU for 1.7% and 3.6% annual gains, respectively. 

Port Tracker said that the first half of 2018 came in at 10.3 million TEU, which marked a 5.1% annual gain, adding full-year 2018 volume is forecasted to be up 4.4% to 21.4 million TEU and top 2017’s 20.5 million TEU for a new record.

And the report also noted that this stretch of record import numbers is occurring in tandem with solid retail sales activity, which saw a 4.9% annual gain in July and a 5% gain on a three-month moving average. NRF also upped its 2018 retail sales forecast to be up 4.5% annually compared to an initial growth range of 3.8%-4.4%.

In his editorial in the report, Ben Hackett, founder of Hackett Associates, observed that the current boom in shipping can mainly be explained by importers’ response to the U.S. trade war with China.

“Consumers appear to be spending money on goods ahead of the tariff price increases that will eventually come,” wrote Hackett. “But there could be a rocky road ahead as the impact of tariffs begins to be more fully felt.”